CA Form 109

What Is A Form 109 CA

The Form 109 CA is a tax document specifically used by exempt organizations in California to report their taxable income and file their business income taxes. The form is akin to a corporate tax return for non-profit entities and is officially titled "California Exempt Organization Business Income Tax Return." 

It is used by entities that have received exempt status from the California Franchise Tax Board (FTB) but still engage in certain activities that generate income subject to taxation.

When to Use CA Tax Form 109

This form is utilized in several situations:

• Organizations with income from business activities unrelated to their exempt purpose are known as Unrelated Business Taxable Income (UBTI).
• Entities with unrelated business activity in California necessitate filing the form as part of their state tax obligations.
• Exempt organizations with certain carryover deductions, like Net Operating Loss or tax credits from prior years.

How To Fill Out CA Form 109 Instruction

Filling out the Form 109 CA involves several critical steps:

• Provide organization details, including the California corporation number and FEIN.
• Indicate any changes in status, such as the first-time filing, amendments, or final returns because of closure or reorganization.
• Select your accounting method from cash, accrual, or other.
• Enter the nature of your unrelated trade or business and provide the Unrelated Business Activity (UBA) code.
• Calculate your unrelated business taxable income, considering any relevant deductions such as net operating losses.
• Apply any available tax credits from Schedule B.
• Summarize the total payments and tax credits, including amounts paid with extension or estimated tax payments.
• Calculate the final tax due or overpayment, ensuring adherence to the general instructions given by the California FTB.

When to File CA 109 Form

The CA 109 Form must be filed by the 15th day of the fifth month following the close of the taxable year, usually May 15th for calendar-year filers. The return is due the next business day if the due date falls on a weekend or holiday. Organizations must ensure timely filing to avoid penalties and maximize their potential tax benefits. An extension request can be submitted using form FTB 3539, though this extends only the filing deadline, not the payment of any taxes due.